Scams and Fraud: Protect Yourself

SCAMMERS, CON ARTISTS, SWINDLERSOften working in partnership, scammers have chosen the vocation of cheating others out of money or precious possessions. These swindlers often are fast talkers, charming, and smooth. They know how to build trust and employ their skills to prey on—and play on—the frailty of seniors.

Why are seniors such an easy target? First of all, many were raised valuing kindness and graciousness. So, they are disinclined to hang up on a caller or rebuff a door-to-door solicitor. Many seniors tend to keep more cash at home and frequently are home alone. Scammers know that older adults are reluctant to report the scam out of embarrassment or fear of losing their independence.

SENIOR RIP-OFFSIn the northern suburbs of Chicago, some scams directed at older adults are more prevalent than others. For example, the ruse entry, home repair fraud, and grandparent hoax have trapped many victims.

Ruse Entry With a fake identity, a utility imposter is at your door saying he’s from the village water department, Nicor or Commonwealth Edison and needs to mark the location for an upcoming project. He looks legitimate. But is he really?

Northfield Police Chief Bill Lustig tells about a con artist who appeared at a resident’s door claiming he was from the Northfield Water Department. The homeowner was skeptical about his need to survey the property for a new pipe, so they went to her backyard for a “show and tell.” The imposter then surreptitiously signaled his partner who burglarized her home while they were outside.

The same tactic of distracting or isolating the victim also works when the imposter gains entry by claiming that the water heater or pipes need to be checked. His partner ransacks the house while the victim is in the basement.

Home Repair FraudAnother swindle often is prompted by a victim’s actual need for home or yard repair. The con artist claims to have extra material from a nearby driveway job that he needs to get rid of it. He says he can give you a good price because he doesn’t want to dump the material. He’ll want money up front—cash or a check made out to him.

Sergeant James Harrison of the Winnetka Police Department said, “If the person offers you something that seems too good to be true, it usually is.” Why? Because that driveway resurfacing may be with inferior products, and you may have paid an exorbitant price for the job instead of getting a bargain. This scam also happens with other types of home repairs, like roofing, siding, and painting.

Grandparent Hoax“This is the Royal Canadian Mounted Police, and we have apprehended your grandson Billy,” the caller says. “You need to wire $1,500 immediately so he doesn’t have to sit in jail overnight.” You don’t want your beloved Billy to be locked up, so you scramble to gather and transmit the money. Unbeknownst to you, Billy is not in trouble, and he’s not even in Canada! But your protective instinct sets in and you react. You are swindled out of a lot of money.

Perhaps you haven’t been trapped by one of these dishonest schemes. But you may have fallen victim to another fraudulent approach...or could be an easy target. Be alert for other scams, like:

Personal Data Theft

Stealing social security (and other) numbers occurs online and over the telephone. A phone ploy can easily trip up an unwary senior because it seems so legitimate. You could receive a call, for instance, from someone saying she’s from a local court. She warns that because you failed to respond to a jury summons, she’s issuing a warrant for your arrest. You need to give her your birth date and social security number, or she will immediately send a police officer to pick you up.

Or you could be called by someone posing as a Social Security employee who claims she needs to verify your personal data.

Medicare FraudJason Echols, healthcare consumer protection coordinator for AgeOptions, cautioned that without your knowledge, your Medicare account could be charged for: 1) Services you didn’t get; 2) Services different from those you received; or 3) Treatment that is medically unnecessary.

Telemarketing or Mail Fraud“You’ve won a $100,000 prize, but you must send $5,000 in taxes to claim the prize,” says the letter. Commander Joe Dugan of the Evanston Police Department warned that you may even receive a counterfeit $100,000 check. So, you send the payment and deposit the prize check. However, it bounces and you’re out $5,000.

Steve Bernas, president of the Better Business Bureau of Chicago, tells about a local family that was going through a parent’s financial matters. They discovered that over a six- to eight-month period, she had lost $100,000 to individuals who had told her she had won lotteries.

Green Dot Scam“An imposter from a utility company might call saying that you owe money for a past bill,” said Sgt. Harrison. You have to pay up or your electricity, gas, or water will be shut off. “You can prevent that,” says the caller, “if I send someone over to pick up cash.” Or he suggests you get a Green Dot card—a prepaid debit card—and give him the security number printed on the card when he calls back.

PREVENT FRAUDThe list of fraudulent activity we’ve discussed is by no means comprehensive. So, given the prevalence of deceptive schemes, you can decrease your risk by taking some precautions.

STOPThis is the #1 rule from police departments and other experts who counsel seniors and troubleshoot fraud. When you pause or hesitate, your thinking gear gains traction. Take time to verify the credentials of the village or utility worker—ID, uniform, vehicle—who appears at your door.

Don’t be pressured into deciding on the spot about a home repair offer. Hesitate. No decision about a large project is so critical that it requires an immediate response.

CHECKIf you need a home repair, you can usually avoid loss by disregarding unsolicited offers and seeking out a contractor. “The problem is,” Bernas says, “consumers don’t do their homework. Ask to see the permits. Verify insurance.” You can research contractors with resources like the Better Business Bureau or Angie’s List. Sometimes a quick check can prevent a rip-off. With the grandchild hoax, for instance, the first step is to call the grandchild or his parent and find out what’s going on. Don’t go directly to the bank to withdraw money. “Unless you can 100% confirm the situation, don’t wire money,” warned Sgt. Harrison.

Check on the apparent prize you’ve won from a foreign or other lottery. First, did you enter the contest? Is it a legal contest? “You will never have to wire money to claim a prize for a legitimate contest,” said Sergeant Roger Ockrim of the Wilmette Police Department. “Furthermore, it is illegal for U.S. citizens to participate in any foreign lottery.” Check invoices for accuracy. Mr. Echols suggested, for example, that you review your printed or online Medicare Summary Notice (MSN) regularly for any sign of fraudulent charges. A baseless claim could cost you—a future claim might be denied because “you already have been reimbursed for those services.”

DISCONNECTHang up immediately on an unknown caller who starts to offer you a deal! “The longer he talks, the more convincing he becomes,” said Chief Lustig. Be cautious even if the call appears to be legitimate. Always ask who it is and the company name. Tell the caller you’ll call back, giving you time to check authenticity. A bona fide enterprise will be willing to give you the information you request and to wait for a call back.

SAFEGUARDYour credit card, checking account, and social security numbers are valuable assets and the fraudster’s ticket to identity theft. Be careful when using an online form—go directly to the website through your Internet browser rather than following a link from an email.

Never give out private information over the phone to an unknown caller or even a supposed official from Social Security, Medicare, or the IRS. “No government entity will request personal data over the phone,” said Cmdr. Dugan.

YOU’VE BECOME A VICTIMDespite your caution, if you are victimized, report the criminal activity. Bernas said that nine out of ten people don’t report incidents of fraud. That’s why con artists get away with it. So, call the police immediately. Sgt. Ockrim said that even if you aren’t duped, report any suspicious activity in your neighborhood. Police will be on the alert and could prevent your neighbors from becoming victims.

You also can inform and turn for assistance to organizations such as AgeOptions and the Better Business Bureau or governmental agencies—e.g., Illinois Office of the Attorney General—that troubleshoot fraud.

Seniors are vulnerable targets across the U.S. “The amount lost to swindlers, whether they are strangers or even relatives, is huge, with estimates ranging from almost $3 billion to more than $30 billion annually,” says Consumer Reports. Don’t be among the local victims of fraudulent activity: educate yourself and take precautions.